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August 14, 2013

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  1. MARKET ASSESSMENT OF THE NON-CONTAINERIZED CARGO THAT COULD BE CAPTURED BY AN ON-DOCK RAIL FACILITY AT PORT CANAVERAL August 14, 2013

  2. Presentation Outline Introduction Description of current and potential rail facilities serving Port Canaveral Description of commodity flows moving through Florida and Brevard County Description of commodities moving through Port Canaveral Findings from interviews with Port Canaveral tenants and importers/exporters Identification of potential rail opportunities Transportation cost assessment

  3. INTRODUCTION

  4. The purpose of the study is to identify non-containerized (bulk and break bulk) market opportunities that could potentially be served by an on-port rail facility at Port Canaveral • Nearby non-port related opportunities may offer potential for the facility: • Large truck and rail markets moving to or from the Port Canaveral area are candidates • An on-port rail facility may also benefit current users of the Port – tenants/shippers: • Transporting cargo now trucked to and from Port Canaveral • Potentially opening new cargo markets that can be served through Port Canaveral

  5. Current cargo flows through Florida are identified through analysis of origin-destination trade flow databases • Cargo flows into and out of Florida counties by rail and truck, based on Martin Associates’ data base developed as part of Florida Trade and Logistics Study: • The database includes truck and rail movements (projected to 2012) • And identifies commodities and tonnages • Journal of Commerce PIERS database identifies shippers and consignees using Port Canaveral (2011): • The database includes commodity and tonnage data • And locations of the shippers and consignees • Tenant/shipper interviews also identify origin or destination of Port Canaveral cargo

  6. Potential opportunities are identified from the trade flow analysis • On-port and off-port market opportunities are evaluated based on: • Market volume • Commodity • Rail service feasibility – proximity to port • An estimation of competing transportation cost is developed to identify the potential competing cost for current routings

  7. RAIL FACILITIES

  8. The FEC currently operates a rail yard in Cocoa – ASI, a stevedore and terminal operator at Port Canaveral, is also a tenant of the yard • Located 10 miles west of Port Canaveral off Hwy 528 • 3,500 ft of trackage • 12 rail spots with room to expand • 7 acres of open storage is available with room to expand • There is a 45,000 ft2 warehouse: • With a 24 ft high ceiling • Owned by Ambassador Services Inc (ASI) • The truck dray between the yard and the Port is estimated to be $17/ton or $374 per truckload

  9. Port Canaveral diagramwith proposed on-port rail spur

  10. FLORIDA CARGO FLOWS

  11. Freight flow data developed by Martin Associates as part of the Florida Trade and Logistics Study are used to identify the flows of trucked and railed goods through Florida • The freight flow data bases were developed for the 2011 Florida Statewide Trade Flow Study • The databases identify commodity flows and tonnages originating in or destined for Florida in 2009: • On a Florida county level of detail • Or on a BEA (Business Economic Area) level for origins and destinations outside of Florida • Commodities are identified as bulk, break bulk or “containerized” (warehoused goods) • Tonnage of the flows were updated to 2012 levels

  12. Local Region Consists of 5 Counties

  13. Truck is the primary mode of transporting395.4 million tons of non-containerized goods originating in Florida counties About 89% of the non-containerized goods movements originating in Florida counties is moved by truck Miami-Dade, Hillsborough, Polk and Marion Counties are the dominant counties where the truck flows originate The leading rail origins in Florida are Polk, Miami-Dade, and Hardee Counties

  14. Non-Containerized tonnage trucked and railed from originating Florida counties Local 5-County Region in bold font

  15. 370 million tons of non-containerized cargo is destined for Florida counties; the majority are delivered by truck 88% of the non-containerized goods movements to Florida counties is by truck Miami-Dade, Hillsborough, Duval and Broward Counties are the top truck destinations Polk, Hillsborough, Miami-Dade and Duval Counties are the leading rail destinations

  16. Cargo tonnage trucked and railed to Florida counties Local 5-County Region in bold font

  17. Truck Cargo origination in Brevard County

  18. Local truck movements of non-containerized goods may offer potential for rail facilities at Port Canaveral • Local truck movements in the 5-County Region, totaling 27.7 million tons are key in that they may offer greatest potential to use a rail facility at the Port: • Trucked non-containerized cargo originating in Brevard County presents an 11.9 million ton market

  19. Of the 11.9 million tons of non-containerized trucked cargo originating in Brevard County… • 6.9 million tons stays in the local region defined as Brevard, Indian River, Orange, Osceola and Seminole Counties: • 4.0 million tons (33%) is destined for Orange County • 1.7 million tons (14%) stays with Brevard County • 0.9 million tons (8%) goes to Seminole County • 0.4 million tons (3%) is bound for Osceola and Indian River Counties • 1.2 million tons (10%) is delivered to South Florida

  20. Destinations of Bulk and Break Bulk Truck Traffic Originating in Brevard County(Florida County or other US BEA)

  21. Top-10 destinations of bulk and break bulk truck traffic originating in Brevard County account for 76% of total tonnage originating in the county

  22. Of the 11.9 million tons of bulk and break bulk trucked cargo originating in Brevard County… • Three commodity groups account for 90% of the tonnage: • Clay, Concrete, Glass, Stone Products – 5.2 million tons • Non-Metallic Ores/Minerals – 4.5 million tons • Petroleum or Coal Products – 1.0 million tons

  23. Bulk and break bulk commodities trucked from Brevard County

  24. Focusing on bulk truck products originating in Brevard County • Nearly 8 million tons of bulk cargoes are trucked from Brevard County • Three counties account for 71% of the destination markets: • Orange County – 46% • Brevard County – 15% • Seminole County – 10% • Non-metallic ores and minerals is the top bulk commodity representing 81% of the market: • The balance of the market is clay, concrete, glass and stone products and petroleum or coal products

  25. Destinations of bulk truck traffic originating in Brevard County

  26. Bulk truck commodities originating in Brevard County

  27. Implications of truck flow data out of Brevard County 59% of break bulk and bulk cargoes trucked from Brevard County are delivered to destinations within the 5-County Region 9% of the break bulk and bulk cargoes trucked from Brevard County are destined for points of more than 400 miles from Brevard County Rail potential is limited for cargo originating in Brevard County and moving more than 400 miles

  28. Inbound truck flows into Brevard county

  29. The origins of non-containerized cargo trucked into Brevard County are more dispersed • Of the 6.7 million tons of non-containerized truck cargo destined for Brevard County: • 25% originates in Brevard County • 13% is from Orange County • 5% comes from Hillsborough County • 7% from South Florida • 11% is sourced from several locations in Georgia • Clay, concrete, glass and stone products account for half of the tonnage

  30. Origins of bulk and break bulk truck traffic destined for Brevard County(Florida County or other US BEA)

  31. Top-10 origins of bulk and break bulk truck traffic destined for Brevard County account for 63% of total tonnage destined for the County

  32. Bulk and break bulk commodities trucked into Brevard County

  33. 3.5 million tons of bulk cargo are trucked into Brevard County • Nearly one-third of the tonnage originates within Brevard County: • Orange County is the source for 21% • Clay, concrete, glass and stone products account for 62% of the market

  34. Origins of bulk truck traffic destined for Brevard County

  35. Bulk commodities trucked into Brevard County

  36. Summary of trucked cargo destined for Brevard County 43% of the break bulk and bulk cargo destined for Brevard County originates in the 5-County Region 17% of the break bulk and bulk cargo destined for Brevard County originates in points more than 400 miles away Rail potential appears to be bulk cargo originating in Georgia, and this includes “Petroleum and Coal Products”

  37. PORT CANAVERAL CARGO FLOWS

  38. Historical total international (import and export) and domestic tonnage through Port Canaveral Source: Port Canaveral Authority – data is by fiscal year

  39. Port tonnage is dominated by bulk cargo • Petroleum products accounted for 79% of total tonnage in FY2012: • Petroleum tonnage doubled between FY2009 and FY2010 with the start-up of Seaport Canaveral • Since FY2010 the domestic market has averaged a 45% share • Ethanol, blended with gasoline to make gasohol, is included in the petroleum tonnage and is not reported separately by the Port • Break bulk is a small and declining market with less than 1% in FY2012 • Fertilizer is a new commodity for the Port – starting in FY2010 • Cement, newsprint, pumice, melons and several other international commodities have disappeared from the Port

  40. Historical inbound tonnage throughPort Canaveral Source: Port Canaveral Authority – data is by fiscal year

  41. The inbound cargo market was 88% of the Port’s total tonnage in FY2012 Three-quarters of the inbound tonnage (import and domestic receipts) in the last three years has been petroleum products The salt market has remained stable Aggregates/rock/sand, limestone and slag markets have varied

  42. Historical outbound tonnage throughPort Canaveral Source: Port Canaveral Authority – data is by fiscal year

  43. Export and domestic shipment markets make up 12% of the Port’s tonnage • 79% of the outbound tonnage over the last three years has been petroleum • Citrus, juices and concentrate are the other principal outbound commodities • Break bulk commodities represent the balance of the outbound tonnage: • Vehicles • General Cargo • Scrap Metal and Steel Products

  44. As shown earlier, the Port handles a significant volume of domestic petroleum products • In CY 2011 the Port handled 2.4 million tons of petroleum products as reported by the US Army Corps of Engineers: • 30% consisted of domestic products received at Port docks: • 63% of the domestic products was gasoline • 25% was distillate fuel oil • The domestic sourcing of this petroleum may provide a potential for rail deliveries • Similarly, 27,000 tons of domestic ethanol is a potential market opportunity

  45. International and Domestic Petroleum Products and Ethanol through Port Canaveral – 2011 Source: Waterborne Commerce of the United States 2011, Part 1; US Army Corps of Engineers

  46. INTERVIEW FINDINGS

  47. Interviews were conducted with the Port’s tenants to identify markets and assess potential benefit of on-port rail Lehigh Hanson Slag Cement – raw slag processed into finished product used as a cement binder Martin Marietta – receives granite/aggregate Morton Salt – receives salt used in pool salt Seaport Canaveral – fuel distribution Transmontaigne – fuel distribution Blue Water – future dry and liquid bulk operations at the Port

  48. Lehigh Hanson • Imported 108,000 tons of slag for processing in 2012: • The slag is ground at the Port Canaveral facility before shipping to customers in the construction industry: • Slag is used as a binder in cement manufacture • The market is truck-served to all of Florida and into Georgia: • 60% (65,000 tons) is destined for South Florida • $640/truck from Canaveral to Medley, FL • Only competitor is in Tampa

  49. Lehigh Hanson (cont’d) • There is potential to shift to on-port rail: • Currently Lehigh Hanson has the option to use rail –60% (65,000 tons) is destined for South Florida • Currently, the dray to the FEC yard (10 miles from the Port) is cost prohibitive • On-port rail has potential to reduce rail costs: • Some markets may shift from truck to rail depending on service availability and competitive cost • Reduced rail costs could expand current markets northward • On-port rail would have to beat the $640/truck (or $29/ton) rate to Medley for example • The slag market is growing, 3-4% annually

  50. Morton Salt • Imports 210,000 tons annually through the Port: • It is processed into salt for water treatment, pools, etc. • Up to 2,000 tons are packaged and exported to the Bahamas • Uses 3rd-party port warehouse for packaged processed salt: • Processed salt is trucked to local markets only • Customers include Lowe’s and similar chains • 10,000 tons of packaged table salt, processed elsewhere in the US, is railed to Orlando and trucked to a Canaveral area warehouse for distribution